The Indian Oil Ministry is contemplating the rescission of a seventeen year old award of the Ratna and R-series oil fileds to an oil consortium led by Essar Oil. According to the consortium's British partner Premier Oil, it would explore legal remedies if the rescission is done, including the invocation of the India-UK Bilateral Investment Protection Agreement.
The Ratna-R series oil fields are located in southwestern Mumbai. It was awarded to the consortium back in February 1996 through an open international bidding process which was the practice done by the Indian government at the time for discovered oil fields for exploration and extraction.
What delayed the implementation of the project was the formalization of the Production Sharing Contract got delayed over several issues, one of which ould be the dispute of the valuation of Essar and the amount of cess and royalties to be paid.
Last August 22, Premiere Oil CEO Simon Lockett wrote a letter to the Legal Affairs Secretary Brahm Avtar Agrawal, indicating the legal opinion the firm obtained showed the Letter of Award granted positive rights to the consortium. These rights include the right to formalize a pSCas well as obtain a corresponding mining lease.
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